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Archive for the ‘Glass-Steagall’ Category
Excellent Point Being Made In Ag Committee on MF Global
December 13th, 2011 | 
Author:
Senator Tom Harkin (IA)
Senator Harkin is making an excellent point: Prior to the CFMA of 2000 customer funds could not be invested in other than municipal or US Government debt fully guaranteed by the US Government.
And the Republicans want less regulation, not more, and they are not calling for people to go to prison and every dime missing taken back from the executives who ran the company so the customers are made whole.
Yep.
As it stands right now any account you hold at any brokerage can be effectively stolen through being lost via the same mechanism. Got that? Good. Your 401k, IRA, anything — all at risk.
Now here’s the disingenuous part of this: It wasn’t the “investment” that led to the problem. It was off-balance-sheet games that led to the exposure and leverage being hidden from regulators, customers and investors. Yet nobody is calling for an immediate end right now to those games.
Senator Harkin, incidentally, voted against repealing Glass-Steagall.
When you’re right, you’re right – and Senator Harkin is right.
He just doesn’t go far enough.
Posted in Corruption, Debt, Economic Crisis, Economy, Financial System, Fraud, Glass-Steagall, Government, MF Global, Money, Senator Tom Harkin | 
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Glass-Steagall: Where Are The Tea Partiers And Republicans?
Roscoe Bartlett [R-MD6]
John Conyers [D-MI14]
Danny Davis [D-IL7]
Marcia Fudge [D-OH11]
Jesse Jackson [D-IL2]
Walter Jones [R-NC3]
James McDermott [D-WA7]
James Moran [D-VA8]
Kurt Schrader [D-OR5]
Louise Slaughter [D-NY28]
Edolphus Towns [D-NY10]
Maxine Waters [D-CA35]
Lynn Woolsey [D-CA6]
Where’s Ron Paul in this list? Bachmann? Anyone with an “R” after their name?
What does this bill do? Put Glass-Steagall back in force. That’s all. The text is refreshingly short and not difficult to understand at all.
To repeal certain provisions of the Gramm-Leach-Bliley Act and revive the separation between commercial banking and the securities business, in the manner provided in the Banking Act of 1933, the so-called “Glass-Steagall Act”, and for other purposes.
The text begins with:
(a) Wall Between Commercial Banks and Securities Activities Reestablished- Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828), as amended by section 615(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended by adding at the end the following new subsection:
You keep hearing about how the “Tea Party” is about fiscal responsibility and capitalism. Well, if so, where’s their support of this? Why isn’t this bill on the floor right now, being debated and passed with broad, near-unanimous bipartisan support?
I’ll tell you why: You are being conned America – AGAIN.
Posted in Economic Crisis, Economy, Financial System, Glass-Steagall, Government, Marcy Kaptur, Tea Party |
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TWO Former Investment Bank CEOs Want Glass-Steagall Back
TWO Former IB CEOs Want Glass-Steagall Back
Posted by Karl Denninger
What’s your excuse now, CONgress?
May 5 (Bloomberg) — Former Merrill Lynch & Co. Chief Executive Officer David Komansky said he regrets promoting the 1999 repeal of the Glass-Steagall Act that separated commercial and investment banks.
“Unfortunately, I was one of the people who led the charge to try to get Glass-Steagall repealed,” Komansky, 71, said in a Bloomberg Television interview today. “I regret those activities and wish we hadn’t done that.”
….
John S. Reed, former co-chief executive officer of Citigroup Inc., also said in January that U.S. lawmakers were wrong to repeal Glass-Steagall.
That’s two.
Now do it Congress.
You were conned. We won’t hold it against you – if you put it back now. If you pull the curtain down on Greenspan’s meddling and your ex-post-facto legalization of his unlawful act of approving a merger he knew was illegal.
This is the solution to the problem and you know it.
It kept the banking system safe for 50 years.
It was 14 pages.
And you can put it back in force with one.
Posted in Banks, Corruption, Economic Crisis, Economy, Financial Regulation, Financial System, Fraud, Glass-Steagall, Government, Money |
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Clinton Once Again Redefining The Word "IS"
Clinton Once Again Redefining The Word “IS”
Posted by Karl Denninger
You have to love Dear Old Bill:
April 18 (Bloomberg) — Former President Bill Clinton said he should have pushed for regulation of financial derivatives when he was president, rejecting the advice of top economic advisers Robert (I am Citibank) Rubin and Larry (I nearly bankrupted Harvard) Summers.
The argument was that derivatives didn’t need transparency because they were “expensive and sophisticated and only a handful of people would buy them,” Clinton said on ABC’s “This Week” program. “The flaw in this argument was that first of all, sometimes people with a lot of money make stupid decisions and make it without transparency.”
Clinton also said that Republicans who controlled Congress would have stopped him from trying to regulate derivatives. “I wish I had been caught trying,” Clinton said. “I mean, that was a mistake I made.”
Uh huh.
Mr. Bill. You do remember this little law PL 106-102, 113 Stat 1338, right?
Do you remember it’s title and the date it was enacted?
Yes, you did sign it Mr. Clinton on November 12th, 1999, and in doing so you retroactively made legal an unlawful merger of two companies that your fabulous former Fed Chairman, Alan Greenspan, intentionally allowed to occur (and granted a waiver for which he had no lawful authority to give), remember?
The law in question is otherwise known as Gramm-Leach-Bliley.
Without it the disastrous derivatives mess could not have happened, because regulated banks with access to The Fed window, not to mention FDIC depositor protection, could not have engaged in derivative trades.
Let us also remember that your Treasury Secretary, Robert Rubin (who you claim gave you “wrong” advice) resigned as Treasury Secretary and brokered the deal to pass GLBA. While doing so he was allegedly in secret negotiations to become the head of Citigroup, the direct and proximate beneficiary of making their merger retroactively legal.
IF you want to try to repair your legacy on this account what you need to do is press for the repeal of Gramm-Leach-Bliley, making it your singular political focus until it is both achieved and every institution that operates in this nation in violation of Glass-Steagall (which would be effectively re-imposed) is broken up.
GLBA was nothing more or less than a license to loot this nation and Mr. Rubin was personally and deeply involved in its passage for both his own and Citi’s corporate benefit. It was and is a shining monument to the colossal corruption and outrageous kleptocracy that became the mantra of The United States under your Presidency and has continued since to this day.
You are 100% responsible for this mess Mr. Clinton, and I, along with many others, have absolutely zero intention of ever letting anyone forget that.
A little visual aid here:
Without Bill’s signature on Gramm-Leach-Bliley, investment bankers never would ahve had access to piles of federally-insured deposits. Without access to this pile of money, the investment bankers couldn’t have purchased derivatives. Derivatives are where the CDO’s and CDS’s live and these are the vehicles that banks used to offload their worthless garbage (risky mortgages) onto the greater investment community.
The housing bubble was impossible to blow without Clinton’s signature on GLBA. That nice little parabolic move there that started in 1999 would have been impossible without the investment banks having access to depositor funds and FDIC backstops for their derivatives book. Without the GLBA that repealed the heart of Glass-Steagall, we wouldn’t be where we are right now.
Posted in Banks, Bill Clinton, Bubbles, Corruption, Debt, Economic Crisis, Economy, Financial System, Fraud, Glass-Steagall, Gramm Leach Bliley, Investment banks, Money |
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Democrats Push For Reinstatement Of Glass-Steagal
In what is the start of the biggest uphill battle in D.C., arguably even bigger than deposing the printing press leprechaun, five democrats are proposing an amendment to reinstate Glass-Steagal, whose repeal, through the Larry Summers orchestrated Gramm-Leach-Bliley Act, in 1999 set the economy on the collision course that culminated with the implosion of every single Goldman Sachs FICC competitor in 2008. The five Democrats who have undertaken the sisyphean task of taking on both Wall Street and their direct boss, are Maurice Hinchey of New York, John
Conyers of Michigan, Peter DeFazio of Oregon, Jay Inslee of Washington,
and John Tierney of Massachusetts.
If adopted, the measure would give banks one year to choose between
being commercial banks or investment banks. The nation’s biggest –
those now commonly referred to as “too big to fail” — would be broken
up. The Obama administration opposes the measure.
Obama, presumably a Democrat, continues to persist in endorsing each and every Republican legacy when it comes to Wall Street’s landed interests (and risk “management” practices). Of course, the last thing the administration needs is for the populace to comprehend the chameleonic nature of the administration’s action.
The act was repealed in 1999 at the urging of, among others, Larry
Summers, now President Barack Obama’s chief economic adviser.The five congressman all voted against the repeal then — and now they want it back.
Former Federal Reserve Chairman Paul Volcker is one of a number of
financial luminaries calling for at least a partial return to
Glass-Steagall. The Wall Street Journal’s
editorial page also endorsed the concept in a recent editorial as a way
to “reduce moral hazard” and “limit certain kinds of risk-taking by
institutions that hold taxpayer-insured deposits.”
The law’s repeal ushered in an era marked by big banks getting even
bigger. The country’s four largest — Bank of America, JPMorgan Chase,
Citigroup and Wells Fargo – now control more than half of the nation’s
mortgages, two-thirds of credit cards and two-fifths of all bank
deposits.
And because their deposits are taxpayer-insured, there’s a growing
concern that they will feel overly confident about making risky bets
through their investment arms because they know that should they suffer
huge losses, taxpayers will ultimately be there to bail them out.
The five Democrats face big obstacles, including their own leadership and the Obama administration.
At this point the whole systemic regulation debate is getting glaringly amusing. At the core of every conflict are proposed reforms that are so obvious from a risk mitigation debate: audited Fed, split up banks which are now bigger than ever before, propping a bankrupt FDIC, which in turn is backing up bankrupt institutions, and a bankrupt country which is trying to fool the world into a game of M.A.D. knowing full well if the US taxpayer goes down directly or indirectly, the world, and the proverbial flood, follow after. And the only sensible reforms are those getting the biggest push back from Obama, and of course, Wall Street. How these two seemingly traditional opponents have ended up on the same side of the page is testament enough to the cataclysmic legacy of Bernanke and Summers. Of course, nothing will be done about anything, in tried and true American fashion, until it is too late, and Main Street is left sorting through the rubble of Goldman’s new glass-plated headquarters, even as all inhabitants have long-ago departed the country and left the U.S. with a few quadrillion in I.O.U.’s. At this juncture the best option before politicians is to simply delay for one year until mid-term elections provoke some vestige of sensibility in the ruling class.
Posted in Administration, America, Bank of America, Banks, Ben Bernanke, Citigroup, commercial banks, Corruption, Democrats, Economy, Fail, FDIC, Federal Deposit Insurance Corporation, Federal Reserve, Financial System, Glass-Steagall, Goldman Sachs, Gramm Leach Bliley, JPMorgan, JPMorgan Chase, larry summers, losses, Main Street, Moral Hazard, Mortgages, Obama Administration, Paul Volcker, risk, Risk Management, Too Big To Fail, Wall Street, Wells Fargo |
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